Transcripts

"Bill of Health" -Making Healthcare Affordable For All

SUSIE GHARIB: Health insurance has long been seen as one of the key benefits of working for a large company. But new surveys show that even in smaller, service-type industries, health benefits are starting to become too expensive for lower level employees to afford. In our "Bill of Health" segment tonight, Jeff Yastine looks at the problem and a possible solution.

JEFF YASTINE, NIGHTLY BUSINESS REPORT CORRESPONDENT: Carolyn Lindsey is a skilled nursing home worker specializing in rehabilitative health. But these days, she worries about her financial health because of constant increases in the cost of her medical insurance plan.

CAROLYN LINDSEY, NURSING HOME WORKER: It's a little too high for the workers. Plus with our income, with paying the insurance, and if you have to pay insurance on your spouse, it's unaffordable. They may pay for free the employees, but when once try to cover your family, it is taking more than two- thirds of your check.

YASTINE: It's a situation a lot more service workers in fields like banking and retail are finding themselves in these days. According to a recent Towers-Perrin survey, the average cost to service workers for employer- sponsored health care plans is roughly $1,900 per person per year. That's not including the additional cost of insuring a spouse or children. That premium is growing 8 to 10 percent a year, but worker salaries are only rising at 3 percent annually. Executives say look closely at the data, and you'll see its effects on working people.

DAVE GUILMETTE, MANAGING DIR., TOWERS PERRIN HEALTH & WELFARE: And you look at what's really happening by sector of the industry, while we might see a general industry trend where enrollment in employer-sponsored plans has dropped say a percent or two, when you look at the actual number of folks who are taking employer-sponsored coverage -- say in the service sector, or in particular, retail -- you see those enrollment rates quite a bit lower than industry average. And also more of an erosion in terms of the number of folks taking those plans when they're offered each year.

YASTINE: Workers say even low-cost plans with high deductibles can be a problem, because of the financial impact when catastrophic medical problems arise. The result is that some insurers are now reworking their plan offerings to make a better fit for service-type businesses.

GUILMETTE: So what we're doing is we're really working on something we're calling affordable health plans, which kind of tries to take a little bit of both of those - some up front services that would help people to mitigate the cash-flow hit, but also the real kind of catastrophic protection that people would be interested in having for those unforeseen situations.

YASTINE: Health benefits are often used to attract new employees. So analysts say banks and other service businesses have a stake in making sure the plans they offer remain affordable. Jeff Yastine, NIGHTLY BUSINESS REPORT, "Bill of Health."